On November the 27th Algeria’s government came out with legislation declaring that Bitcoin is a dangerous commodity that completely hides the anonymity of the parties involved in transactions and that Bitcoin would lead to an increase in illegal activities. According to Algeria’s 2018 Financial Bill any use of Bitcoin in Algeria would result in punishment ‘in accordance with the laws and regulation in force’.
The powers at be further go on to state that Bitcoin can be used for drug trafficking, tax evasion and money laundering. My response is criminals also use USD, DZD, GBP, Cell Phones and Cars; it does not mean that we should ban everything that a criminal can use. It is quite easy to see what is happening here is that the Algerian Financial body fears what it does not know and therefore acting out of emotions rather than logic.
There are a few things wrong with what they state:
1.) Bitcoin completely hides the anonymity of its users: This is a false statement. Everything occurring on Bitcoin’s protocol is stored on a public ledger. The public ledger is the blockchain, blockchains have been around for years now and they have been tried, tested and documented thoroughly so the fact that the Algerian bill got this fact so wrong clearly portrays the levels of their knowledge around this subject.
2.) The fact that criminals can use it: They can also use any other currency in the world. You do not ban mobile phones because illegal activities are being conducted through them. With anything, if a criminal wishes to use a certain currency they will find a way around the system and they will continue to do so. By banning it, you are only freeing up the market for them to continue to use it. The decision to ban Bitcoin is backwards; criminals will be the ones that will benefit greater in the end because they have an open market where they do not need to compete with others to buy and sell making their profits greater which is exactly the opposite of what the government wants. You can’t justify the reason for banning Bitcoin is because criminals use it, because no one ever abused the USD or any other currency…
3.) The Bill written by the NPC (National People’s Congress) defines Bitcoin as ‘so-called virtual currency’: This immediately shows us that they are not knowledgeable about this section of technology effectively rendering their entire arguments mute. Would you listen to a plumbers note on building a rocket? No because the plumber has knowledge and skills but in a different sector so his points are not coming from a strong background. I truly believe this is a step in the wrong direction for Algeria as they have not spent the required time to look into what Bitcoin actually is and then made their decision instead of fearing the unknown and acting out in emotions.
Bitcoin is not totally anonymous, yes user details is never stored or known on the public ledger but however your wallet address is unique therefore making it an identifier meaning you can be identified.
It’s not too late for Algeria however, by following us on twitter and helping us spread the message we can bring knowledge and attention to the financial body of Algeria and hopefully revise their mistakes in the future.
Thanks for reading!